Unemployment in the region increases but only due to jump in labour force

The London-area jobless rate jumped from 6.2 per cent to 6.5 per cent in January as more people surged back into the job market.

Statistics Canada says the number of people employed in the wider London region, which includes St. Thomas, Strathroy and parts of Elgin and Middlesex counties, was only down by about 100 last month.

But the area labour force grew by 1,400, which pushed up the unemployment rate.

The participation rate for the London area — the percentage of adults either working or looking for jobs — rose slightly, to 60.1 per cent, but is still down 0.4 per cent from a year ago and well below the national rate of 65.5 per cent.

Nationally, 2018 got off to a bad start as the Canadian economy lost 88,000 jobs and the jobless rate rose from 5.8 per cent to 5.9 per cent.

But all the losses last month were in part-time jobs, which decreased by 137,000 while full-time jobs rose by 49,000.

Statistics Canada had previously reported the national jobless rate for December as 5.7 per cent, but that was revised upward to 5.8 per cent as part of an annual review of the seasonal adjustment factors.

The review also revised London-area jobless rates for 2017. Figures for November, October, September and June also were reduced slightly after the review.

Last month was the first setback for Canada’s job market in 16 months and Ontario was hit hard, BMO economist Douglas Porter noted.

Ontario’s jobless rate fell slightly from 5.6 per cent (revised from 5.5 per cent) to 5.5 per cent in December. But that was only due to a sharp drop in the labour force, which shrank by 55,000. The number employed fell by 51,000 but all the declines were in part-time jobs.

Porter said some special factors came into play last month, including Ontario’s minimum wage hike, harsh weather that affected construction and an inevitable pullback after exceptionally strong 2017 job growth.

“Today’s sour news is at least in part an offset to the unusually strong gains seen late last year, and most likely does not represent the start of new trend. However, it does bring the job market back down to Earth,” Porter said in an online release.

Windsor gained 3,700 jobs, which dropped its jobless rate to 4.6 per cent, down from six per cent. The unemployment rate in Kitchener-Waterloo fell to 5.1 per cent.